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    September-2016
 
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Companies Fail To Properly Care For Long-Time Customers, Losing Sales, Trust

Recently a reader was involved in an (hopefully) unusual situation where his insurance provider’s sales staff had not contacted him for 10 years.

Upon making his plight known to customer service, a sales person was assigned. That salesperson reported to her boss that she had contacted the policyholder and he was satisfied. Only when a customer service manager called to confirm did the company find out he was not contacted at all.

A panel of experts was then asked to comment on the situation. There consensus remarks as pertain to the sales management aspect of situation are listed directly below and their more in-depth responses further down.  Comments from readers are sought and should be sent to editor@is-incorp.com.

Overall, the comments centered on the fact that no salesperson had called the client in 10 years.  Many cite the company and its sales managers as the main culprits.  They also said it was symptomatic of a more ingrained fault-line within the company. Management was depending on customer service to manage the account and to keep clients happy.

Many experts urged the company and sales manager to probe deeper as to why the salesperson thought it necessary to lie and question whether the emphasis on new sales put current revenue at risk. The experts were divided as to whether the salesperson should be fired, with many wanting to know more as to the causes of her action.

All experts said the company needed to address this situation as a company-wide fault in which other long-time clients may also be suffering from neglect.  At the same time, several pointed out that the company was losing out on possible additional revenue if no regular contact was being done by many sales force members.

Finally, many experts also addressed the fact that the customer may be having second thoughts about the honesty of the company if such behavior was tolerated.

More specific comments are listed below:

Alan Ring found it inexcusable for a long-term customer to not hear from a salesperson for 10 years. It's great that the customer has a good relationship with the customer service department. However, someone in the sales organization should be "touching" the customer on a regular basis (at least 2-4 times per year) to keep them up to date on additional benefits/offerings. Plus, it's always good to have someone other than the person/people the customer deals with on a regular basis touch base from time to time to ask, "How are we doing?" and "What could we do better?" 

If the salesperson flat-out lied, termination might be warranted. However, first I would have the following conversation: "I don't understand why you did not contact the client. They said they were interested in learning about additional benefits/offerings. Don't you see that kind of request as an opportunity to make an incremental sale?"   Alan Rigg, President, www.MySalesTest.com.

Cynthia Olmstead thinks the most important aspect of this situation is to ensure that the long time Customer does not lose trust in the Company and/or the relationships that have been built over the years. When a Customer is not kept up to speed on new opportunities, offerings, benefits his/her confidence will start to erode and the question of “what else have I missed?” seeps in to the Customer’s thinking. This is dangerous as the business relationship is now in jeopardy and trust is precariously teetering on a thin edge.

  1. The Sales Manager needs to address the situation immediately with the Sales Person who is assigned to that Customer. The Sales Manager needs to begin by doing the following:
    Explain the situation to the Sales Person as well as the implications of the potential loss of business.
  2. Have the Sales Person explain her side of the story. It is important that the Sales Manager verifies the facts with the Sales Person and not rely solely on the word of the Customer.

The Sales Manager needs to determine if the Sales Person is being truthful. By being accusatory and condemning, the Sales Manager may never get the real facts. By asking for the Sales Person’s perspective in an “information gathering” setting, the truth is more apt to be revealed.

Bottom line is that the Customer is most important. Losing the Customer’s trust is a high-risk game. Salvaging that relationship is critical. If it can be achieved with the Sales Person rebuilding that trust, the company is strengthened. If it cannot, then a new Sales Person needs to be brought in to begin building the customer interfacing. Cynthia Olmstead, President, www.trustworksgroup.com.

Bryan Feller has another take on the case.  He says the situation reeks of poor sales management. The fact that no one on the management team knew that a long–time client felt neglected is inexcusable.  Two basic management structures that could have prevented this are:

  • Use of a robust CRM (customer relationship management) system where clients can be categorized by importance and regular contact can be scheduled.
  • Regular account reviews. Sales management should be reviewing current accounts with his/her sales people on regular basis.

The salesperson in this case should be fired.  The neglect of the customer is bad enough but lying about the contact makes this person terminable.  Such behavior can be cancerous to a sales team. Bryan Feller, President, www.TheCatalystGroup.com.

Rod McKinnis feels high performance sales organizations understand people perform better when they know what is expected of them. In addition, it is equally important to hold people accountable for their goals and sales activity.

As a Sales Manager it is important ensure everyone is aware and performs to the expectations of their role. "Goal diffused" organizations and those that manage without consequences tend to struggle in sales. Therefore my thoughts are as follows:

Assuming this is the only incident with the Sales Rep, this becomes a coaching opportunity. It's vital to explore the root cause of not calling the customer to determine if the Rep is in indeed in the right role. If the issue(s) appear minor the following 3-step approach is recommended:

  1. Discuss the incident
  2. Solicit the Rep's explanation and address accordingly
  3. If appropriate, provide a written warning with outlined consequences.

If the issue(s) appear more serious or chronic the following 5 Step approach is recommended:

  1. Re-review the objectives of the role
  2. Provide a written warning (with consequences and language that states..."up to and including termination.") 
  3. Administer a 30-day Action Plan outlined with daily objectives.  
  4. Review the plan weekly with the Rep for the next 30 days. 
  5. If the Rep does not perform to expectations, proceed to reposition the Rep to another role Or move towards termination. 

Rod McKinnis, CEO, www.SalesIsSimple.com.

Linda Hanson has another view arguing that if she were going to fire anyone, it would be the sales manager for not doing her job. This is a clear case of a sales manager not managing her people, not giving them their goals and expectations for how they handle accounts. 

HR's responsibility, if it is determined that the employee is not doing their job, is to work with the sales manager to develop and document a plan to develop this person, and likely other sales people within the company.  At that point if the sales person does not meet expectations, and firing is required they can clearly make that decision. 
 
In addition, Hanson has some serious questions about the sales manager.  Every sales manager should know exactly what is going on with their sales people and their accounts.  In addition, a sales manager should visit top accounts on a regular basis to ensure a strong relationship.  If no one has seen an account for 10 years the company has a really large problem.
 
If information has not been passed on to this 40-year-old account, it likely hasn't been passed on to other accounts, which means the company is losing sales opportunities and not providing the necessary support to help accounts become successful.  Linda L. Hanson, CMC, www.Ilhenterprises.com.

Heather Bennett says the situation reeks of poor sales management. The fact that no one on the management team knew that a long –time client felt neglected is inexcusable.  Two basic management structures that could have prevented this are:

  • Use of a robust CRM (customer relationship management) system where clients can be categorized by importance and regular contact can be scheduled.
  • Regular account reviews. Sales management should be reviewing current accounts with his/her sales people on regular basis.

The salesperson in this case should be fired.  The neglect of the customer is bad enough but lying about the contact makes this person terminable.  Such behavior can be cancerous to a sales team. Heather Bennet, www.heatherbennetresources.com

Francie Dalton has a word of caution. First, be sure the information is accurate.  Perhaps the sales person has contacted someone else at the firm.

Second, if the sales person's performance has been good, even though she has lied egregiously in this case, the firm may be better served by giving her a second chance. Doing so may inspire renewed, reinvigorated commitment to the firm that may show itself in improved performance. 

Make it clear that lying won't be tolerated, that she'll only get ONE second chance, and that her lie will have the consequence of increased scrutiny. F. M. Dalton, President, www.daltonalliances.com.

Voss Graham argues that assuming the sales person told a flat out lie to the sales manager, there is grounds for instant dismissal. A sales manager cannot condone or have any tolerance for dishonesty. The integrity of the firm and the sales force as the customer as dishonest and therefore, the customer see a whole has every right to question everything that is told to the customer.

A sales-driven company would always have the sales team calling on all customers on a regular basis and especially long-term customers. Incentives should be in place for sales people to grow and maintain all accounts. A product or operations driven company will assume that long time customers are happy with their product or service and will never leave.

Therefore, accounts become assigned to the "house" and are off limits to any sales people. Again, the logic is that the business would come to the company no matter what the sales person does, and it would be a waste of money to pay commissions on "guaranteed" revenue.
Voss Graham, CEO, www.InneractiveConsultingGroup.com.

Tom "Bald Dog" Varjan says that in his experience the salesperson's behavior is a good reflection of the company's culture. He has a feeling this salesperson is paid in pure commissions. He has no incentive whatsoever to nurture current clients since his money comes from hunting down new clients. The more time he spends on nurturing current clients, the less new sales he can make, and the more he gets beaten up by the sales manager.

In most organizations a small group of people, the sales force, is single-handedly responsible for keeping the company in the black. But here is a problem. People, who are entrepreneurial enough to work for pure commission, work for themselves. They don't care about the long-term success of their employers. When something bad happens they go to the competition.

Is this surprising that there is this discrepancy between sales and the other departments? No. Management creates this problem by compensating salespeople one way and the others in other ways. Tom Varjan, President, http://www.di-squad.com.

Don Schmincke has a series of questions and answers he would pose to the organization.

What would you do as the sales manager and HR manager to handle the situation with the salesperson? Would you fire immediately? Other responses?

Inquire, then fire. Did she reach their assistant and was told all is well? Or did she make contact and the customer forgot? Or was it a lie? If a lie, do you really think this is the first time it happened? Even if the client was targeted as DEAD, lying is not a valid method for maintaining brand reputation in the industry.

Second, 10 years?! I'd have a talk with the sales manager. She may need to be replaced. What are the loss ratios? How much turnover from loyal customers? This data should already be monitored. Is it? Don Schmincke, President, www.sagaleadership.com.


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